US stocks advance while dollar, yen weaken amid stimulus bets

April 12 (Bloomberg) -- U.S. stocks rallied, sending benchmark indexes to the biggest back-to-back gains of the year, while the yen and dollar weakened as signs the Federal Reserve and Bank of Japan will stimulate growth overshadowed an unexpected jump in American jobless claims. Gold climbed.

The Standard & Poor’s 500 Index added 1.4 percent to close at 1,387.57 and rebounded 2.1 percent in two days following a five-day tumble, its longest of 2012. The Dow Jones Industrial Average surged 181 points. The S&P GSCI Index of 24 commodities increased 1.2 percent as nickel and silver jumped at least 2.6 percent and gold climbed 1 percent. Chinese stocks trading in the U.S. surged before the nation reports economic growth figures. The yen slid against all 16 most-traded peers and the dollar fell versus all but the yen. Ten-year U.S. note yields rose two basis points to 2.06 percent.

Federal Reserve Vice Chairman Janet Yellen and New York Fed President William C. Dudley endorsed the view that borrowing costs will stay low through 2014, with Dudley noting it’s “still too soon to conclude that we are out of the woods.” The Bank of Japan will pursue “powerful easing” to overcome deflation, central bank Governor Masaaki Shirakawa said today.

“We’ll continue to see similar language: the Fed is ready to provide more accommodation if necessary,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc. His firm oversees $3.51 trillion as the world’s largest asset manager. “I wouldn’t expect a definitive sign in April that there’s another round of quantitative easing coming. It’s just the idea that the Fed has that in their back pocket.”

The Fed meets in two weeks to debate policy after Labor Department reports showed an unexpected increase in jobless claims to a two-month high of 380,000 last week, and growth in payrolls weakening to the slowest in five months in March.

Google Earnings

Hewlett-Packard Co. surged 7.2 percent, the most in three years, to lead gains in the Dow after research firm Gartner Inc. said the global personal-computer industry unexpectedly grew in the first quarter. Caterpillar Inc., Alcoa Inc., Boeing Co. and Bank of America Corp. also rose at least 2.4 percent to help lead the Dow up 1.4 percent to 12,986.58.

Google Inc., the world’s largest Internet search company, advanced 2.4 percent before releasing first-quarter results after exchanges closed. The stock added another 0.4 percent in extended trading as Google reported better-than-estimated adjusted earnings of $10.08 a share after demand for its newer services helped fuel growth. Google also said it will introduce a new class of nonvoting capital stock which will be distributed through a dividend to existing shareholders.

AT&T Inc. rose 1.3 percent as JPMorgan Chase & Co. advised buying the shares. McKesson Corp. jumped 3.9 percent after winning a drug supply contract valued at as much as $31.6 billion over as many as eight years.

Two-Day Rebound

The S&P 500 yesterday halted a five-day, 4.3 percent drop after Alcoa reported an unexpected first-quarter profit, bolstering optimism at the start of a reporting season in which per-share earnings growth is projected to have slowed to 0.8 percent, according to analyst estimates compiled by Bloomberg.

The Bloomberg China-U.S. Equity Index of the most-traded Chinese stocks in the U.S. surged 2.5 percent, the most in three months, with Renren Inc. and Tudou Holdings Ltd. leading gains as investors awaited a report at 10 p.m. New York time that’s forecast to show China’s economy expanded 8.4 percent last quarter.